Alan Lakey is senior partner at Highclere Financial Services
“The client fits many lenders using the various income calculators but, the CCJ disqualifies her from most, as high-street lenders will not accept adverse applicants.
The CCJ does not present an insurmountable problem for specialist lenders but it does when allied to the low deposit and the need for over four times income. There is also potential for further grief depending on whether the previous lender considers the historic mortgage payments to be in arrears. A patchy record may detract further from the application. This aspect needs clarifying before a definite recommendation can be made.
Her bank may be flexible if she has proven a good customer in other respects. If not, Kensington or High Street Home Loans, will allow the CCJ and the small deposit. They can offer 7.54 per cent fixed for two years and 7.69 per cent fixed for three years respectively with no higher lending fee. While relatively high these may prove the best of those available.
Sharon O’Callaghan is director of regional sales at LMC
“All LMC products have the advantage of accounting for the number of CCJs against an applicant rather than penalising them for the amount they owe. The previous mortgage seems to have been maintained satisfactorily but our products would also allow for one missed payment, if needed.
The applicant’s income is fine as we are able to include the bonus or overtime at 100 per cent. At this loan-to-value level, we would allow an income multiple at 3.75 of the total income which covers the loan the applicant requires.
LMC can offer the client the option of a two-year fixed or a two-year discounted product. If she would like to proceed on a full status basis the rates start at 6.14 per cent, with the self-cert option available at only a 0.10 per cent increase across the range. If the client would like the self-cert option, the only additional document we would need is an affordability certificate.”
Paul Suchet is managing director of Money Plus
“Her CCJ, despite being caused by her husband, does limit her options, especially with only a 10 per cent deposit. I would recommend a two-year fix with Advantage Home Loans on its near-prime mortgage range at 6.19 per cent. It accepts one CCJ, irrespective of amount or the date it was registered
It also offers a free valuation and the arrangement fee of £699 can be added to the loan, which will help lower initial costs.
Her income is more than enough to satisfy Advantage Home Loans’ affordability calculations. Although high multiples are helpful, it’s always necessary to check that the payments are actually affordable.
The client’s income is roughly £3,100 a month and the payment would be around the £885 mark, meaning that, as she has paid off all other existing debt, her debt-to-income ration is below 30 per cent, making the payment easily affordable for the client.”
A re-mortgage would be advised in two years when the rate increases and the ERP ends. The CCJ will be older and also the property will most probably increase in value, so she will be borrowing a lower LTV, both of these aspects will widen her choice of lender and lower her rate.
